MAHINDRA RIDES ON ROXOR TO STRENGTHEN ITS US DRIVE
Almost a decade after riding into the US market with its tractors, Mahindra and Mahindra (M&M) is betting on yet another niche offering to make deeper inroads into the US. The ROXOR, an off-road sports utility vehicle that the Anand Mahindra-led company unveiled in Detroit, Michigan, last weekend, could well be the automaker’s entry ticket into the world’s most competitive auto market. Slated to go on sale later this month with a sticker price of $15,000, Mahindra has big plans riding on its tiny off-road sports utility vehicle and its four-year-old manufacturing, engineering, and design unit in Michigan.
Almost a decade after riding into the US market with its tractors, Mahindra and Mahindra (M&M) is betting on yet another niche offering to make deeper inroads into the US.
The ROXOR, an off-road sports utility vehicle that the Anand Mahindra-led company unveiled at Detroit, Michigan last weekend, could well be the automaker’s entry ticket into the world’s most competitive auto market.
Slated to go on sale later this month with a sticker price of $15,000, Mahindra has big plans riding on its tiny off-road sports utility vehicle and its four-year old manufacturing, engineering and design unit in Michigan. The facility, called Mahindra Automotive North America (MANA), is consolidating the company’s functions in the region. MANA is set to shape Mahindra’s future mobility
offerings, Pawan Goenka, managing director, M&M, told Business Standard.
“We are now well established in the US in our tractor business and ROXOR is the next step. It gives us an entry into the automotive side, albeit off-road, to begin with. Depending on how the Mahindra brand does in that space, we will decide on our next step,” Goenka said.
According to Goenka, the leisure/off-road segment in the US is almost half a million vehicles a year. The ROXOR, he said, will address only a sub-segment of the off-market consisting of large and small manufacturers. Mahindra plans to sell the ROXOR through its Power Sports channel. The company has already signed around 230 dealers and has made advance bookings of some 3,000 ROXORs.
Rakesh Batra, partner and automotive sector leader at EY India, said: “Entry into the US market through a niche makes a lot more sense, since the regular passenger vehicle market is highly competitive and needs a lot more product and distribution capability, which takes time to build up.”
Mahindra adopted the same strategy when it entered the tractor market and it paid off, Batra added.
To be sure, this is the second attempt by the Anand Mahindraled firm in less than two decades and the first by an Indian company to set foot in the US automobile market. The company’s previous attempt to launch pick-up trucks in the US in 2010 hit the wall following a stand-off with its distributor, which eventually ended in court.
Developed at MANA, the ROXOR features a steel body on a boxed steel frame, a heavy-duty Mahindra turbo-diesel four-cylinder engine and an automotive style five-speed manual transmission.
Besides engineering, manufacturing and marketing of the ROXOR, MANA is currently working on two more projects, the first of which is engineering of global products. A global multi-purpose vehicle codenamed U321 will be the first product from MANA, Goenka said. It is expected to be launched in the first half of the next financial year.
MANA is also engineering and prototyping delivery vans for the US Postal department. The project is currently under testing. “We do not know when the final decision will be mad0e,” said Goenka, referring to the delivery van.
Mahindra Automotive North America has, till date, created 300 new jobs and invested over $230 million in southeast Michigan. The company plans to create an additional 400 jobs and invest another $600 million in the local economy by 2020.
THE LEISURE /OFF-ROAD SEGMENT IN THE US IS ALMOST HALF A MILLION VEHICLES A YEAR. THE ROXOR, WILL ADDRESS ONLY A SUBSEGMENT OF THE OFF-MARKET CONSISTING OF LARGE AND SMALL MANUFACTURERS.” PAWAN GOENKA Managing director, M&M